Dollar steadies vs yen as Japan budget report lifts risk appetite
The dollar bounced against the yen on Friday, as a report that Japan may unveil a supplementary budget lifted risk appetite and helped the greenback pare earlier losses.
The U.S. currency had earlier dipped to as low as 120.29 after the Bank of Japan stood pat on monetary policy, disappointing some speculators who had bet that the central bank would expand its already massive stimulus.
The greenback received a reprieve, however as Tokyo stocks pulled out of the red following a report by the Nikkei newspaper that Japan's government is considering compiling a 3 trillion yen ($24.77 billion) extra budget in preparation for the trans-Pacific trade pact.
The safe-haven yen often moves in inverse correlation with Japanese stocks, falling when investor risk appetite improves.
All the same, the dollar was capped by caution ahead of BOJ Governor Haruhiko Kuroda's press conference at 0630 GMT when he is set to elaborate on the central bank's decision.
The data helped the common currency bounce from a 2-1/2-month low of $1.0896 struck midweek following the Federal Reserve's hawkish stance.
The Australian dollar nudged up on bargain hunting but remained shaky after taking hits earlier in the week on the back of the Fed's statement and rising risks of a rate cut at home.
The Aussie was up 0.3 percent at $0.7097 AUD=D4 but remained within an arm's length of a 3-week low of $0.7067.
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